Division of Matrimonial Assets (For Non-Muslim)

Divorce and Division of Matrimonial Assets: Everything You Need to Know

Divorce is the legal dissolution of a marriage. When a couple separates, they have to decide how to divide their assets. This division of matrimonial assets process is not that simple as it may seem at first glance. Dividing the parties’ assets is one of the most laborious tasks when handling divorce as parties would, more often than not, desperately attempt to squeeze as much money as possible out of the marriage and to make sure they do not lose a penny to the one they used to love. After all, when love fades, what is left is all dollars and cents.

Division of Matrimonial Assets – How Does This Process Work?

What is divisible under the division of matrimonial assets?

The law governing the division of matrimonial assets is set out in Section 76 of the Law Reform (Marriage and Divorce) Act 1976 (“the LRA”).

When dealing with the division of matrimonial assets, we must first classify the matrimonial assets into two parts:-

1. property acquired during the marriage by both parties’ joint efforts [Refer Section 76(1) of the LRA] – matrimonial property; and
2. property acquired during the marriage by the sole effort of one party [Refer Section 76(3) of the LRA] – non-matrimonial property.

Properties meant here are not confined to only houses (i.e. immovable properties) but include movable properties as well, such as cars, cash, shares and stocks etc.

Properties acquired by joint efforts

Division of matrimonial properties – which relates to properties acquired by the joint efforts of both parties is permissible as of right. The Court is enjoined to lean towards equality of division between the parties subject to the following considerations:-

1. the extent of the contributions made by each party in money, property or work towards the acquiring of the assets ;
2. any debts owing by either party which were contracted for the joint benefit; and
3. the needs of the minor children, if any, of the marriage.

The parties’ joint efforts in acquiring the properties would include their direct financial contribution (eg. payment of deposits, down payments and/or loan instalments etc) and indirect financial contribution (eg. purchases for the fixtures, furniture, household and grocery expenses, payment for the utilities bills etc). Non-monetary contribution is generally recognised by the Court as well.

Properties acquired by sole effort of one party

For non-matrimonial properties – which relates to properties acquired by sole effort of one party, the division is not as of right. However, the Court may still order a division of the non-matrimonial properties in proportion subject to the following considerations:-

1. 1. the extent of the contributions made by the other party who did not acquire the assets to the welfare of the family by looking after the home or caring for the family; and
   2. the needs of the minor children, if any, of the marriage.

This means that even if the other party does not make any effort or financial contribution in acquiring the non-matrimonial properties, the Court can still have regard to the contribution he/she has made to the welfare of the family.

Examples of contributions towards the welfare of the family are working as a housewife, looking after the home, caring for the family, taking care of and rearing the children etc.

Assets owned by one party prior to the marriage

As a general rule, assets owned by one party prior to the marriage is excluded from division unless it is proven that the assets acquired before the marriage has been substantially improved by the other party or by their joint efforts, as provided under Section 76(5) of the LRA. In other words, to be entitled to a share of an asset owned prior to the marriage by one party, two conditions must be fulfilled. Firstly, there must be substantial improvements in the assets during the course of the marriage. Secondly, the source of that improvement should be the claimant’s effort or the joint efforts of both parties.

Assets acquired during the marriage by one party by way of a gift, inheritance or succession

Another issue that has often arisen is the assets acquired during the marriage by one party by way of gift, inheritance or succession (hereinafter referred to as “the inherited property”). It is established that the inherited property could not form part of the matrimonial assets and should be excluded from division as the inherited property is neither property acquired by the joint efforts of the parties nor property acquired by the sole efforts of one party.

Time to divide matrimonial assets

Generally, the matrimonial assets must be divided when the decree of divorce or judicial separation is granted by the Court, and not at a later stage.

Application for division of matrimonial assets before a petition for divorce or judicial separation is presented could not be made in Court as well.

Common Misunderstanding

Most people have the misconception that he or she shall have the right over the matrimonial assets if the other party has committed adultery, or has behaved in such a way that causes the breakdown of the marriage.

It must be highlighted that adultery or the behaviour of the other party is only a factor relevant to the award of damages and maintenance and will not be taken into account when determining division of matrimonial assets.

Conclusion

Despite having said the above on the parties’ entitlement to the matrimonial assets, evidence must be adduced in Court to prove his or her contribution or effort whether monetary or non-monetary to the acquisition of the assets in order to succeed in his or her claim for the assets.

However, it is often a difficult task as spouses do not usually keep record of their payment towards the household or properties.

If you have any questions or require any additional information, please contact our lawyer that you usually deal with.

This article is written by 

Gwen Yeap Siew Fen
Partners, Low & Partners

Jareen Lee Hoay Yin
Principal Associate, Low & Partners